[Letran]

Just came from London and Paris for the holidays. I'll be posting my tips, advice and experience on the Travel thread.

While in London, I found that cost of living is relatively high, specially when converting GBP to CAD. The city is not without its charms and I could certainly see myself going back. I'm flirting with the idea of buying a London property to rent out, mainly to generate GBP income as well as to capitalize on London's increasing housing market. Again another form of investment.

This is the start of my research, all I'm aware of this time is that the investment will be between 300k-500k GBP It is a sizeable investment. But then again it is all about ROI. Is there money to be made? Are the headaches of owning a property 7 time zones away worth it? Although before London I was looking already into buying a South American property for rental anyway. But that seems easier not to mention cheaper.

I will be speaking with Property Managers and Real Estate agents in London but I would love to hear what the great minds of CMF have to say.

 

[HaroldCrump]

London R/E market is possibly at a 300 yr. high bubble at this time :biggrin:
You are better off buying investment property in downtown Manhattan than in London, from a valuation perspective.

 

[Just a Guy]

I find it hard to manage properties in canada, I'd can't imagine doing it on a different continent. I also think that if your starting price is in the 3-500k, it'll be tough to make a profit. Also, there may be different rules or laws...like in Florida where the tax rates are different if your an investor from canada, or where you can't even paint your own place if you're not a U.S. citizen...

Plus, you aren't familiar with the area, you'd have to really trust your advisors...who may take advantage of your ignorance to line their pockets...

 

[Letran]

London R/E market is possibly at a 300 yr. high bubble at this time :biggrin:
You are better off buying investment property in downtown Manhattan than in London, from a valuation perspective.

thanks, good advice.

Though, I thought that it peaked in 2008 and came down a bit and it is starting to go back up again.

 

[Letran]

I find it hard to manage properties in canada, I'd can't imagine doing it on a different continent.

You are right in saying that properties will be easier to manage locally. I have a couple in downtown Toronto, one of which I haven't seen in 5 years. Currently though, with downtown prices, I think they are currently overpriced and buying to rent at these prices no longer appeal to me.

I also have a student rental in Kingston, Ontario for Queen's University students

I also do own a couple of Las Vegas properties that I have never seen personally (ever) but have generated cash flow and income from day one for the last three years.

I did buy a small condo in the Trump Tower in the Philippines but it is still in construction.

I'm not saying it is easy but with enough research and with the right people it could be profitable with very little regular interaction.

I also think that if your starting price is in the 3-500k, it'll be tough to make a profit.

I fail to see how the initial investment amount dictates if it can make a profit or not. Though as mentioned on my initial post I haven't look at hard figures but so far from what I've been reading the cap rate is about 5% http://www.thisismoney.co.uk/money/mortgageshome/article-1596759/Ten-tips-buy-let.html
I do not know if it is possible but if I can buy a property for 400kGBP and generate 3kGBP monthly it will cover my cost but I haven't investigated the hard cost yet etc or if 3k monthly rental income is realistic. Although I have been told in the immediate outskirts of London, ROOMS rent out at 600-900GBPs per room/month. Also from experience I know that furnished apartments can rent 300-600GBP per day. prior to me booking Premier Inn I signed a rental agreement with City Marque for 300GBP per day but they made a mistake on the days that I needed the place so I chose to cancel the rental

Also, there may be different rules or laws...like in Florida where the tax rates are different if your an investor from canada, or where you can't even paint your own place if you're not a U.S. citizen...

There are HOAs in Florida that are restrictive but that that is not any different in some of our condo associations that enforce uniformity among the community. I'm not familiar with the Florida tax rates yet but again if at the end of the day your property is appreciating and your rent is creating cash flow then your investment is still sound. My cap rate in Las Vegas with all the taxes, insurances etc... accounted for is 9%. My cap rate in my Toronto downtown property is 3%

Plus, you aren't familiar with the area, you'd have to really trust your advisors...who may take advantage of your ignorance to line their pockets...

Yes but that will be true, wherever you buy here or there or anywhere. Nothing replaces proper research, and doing your homework.

 

[Just a Guy]

I also seem to remember that banking and mortgages are different in Europe...they have inter generational mortgages in some cases...things aren't the same. Another thing to consider is estate issues and taxes...

It's the same in canada, in the east, you have to worry about UFI, rental water heaters, in the west construction is wood, not brick. You generally need to know your stuff to be successful. If you're aware of it, I'd say go for it.

Personally, I could get a lot more doors in Canada for the same amount of money and generate a lot more cash flow. In 2013 I bought 5 places for $375k that generated $5500/month to start (rents got raised this year to nearly $6000), plus I was able to finance them 100%.

Having property around the world has appeal, but so far not the profits I can find locally...

I was really temped by the USA in 2008, but didn't take the plunge. Marina may be a better source of advice, she's got stuff down south as well as here.

 

[CharlesF.Donahue]

Here is a list of some places of UK where investors like to invest these days.
Kent
Milton Keynes
Exeter
Aberdeenshire
Corby
Yorkshire market towns
Basingstoke

 

[Letran]

Here is a list of some places of UK where investors like to invest these days.
Kent
Milton Keynes
Exeter
Aberdeenshire
Corby
Yorkshire market towns
Basingstoke

Thanks for the list Charles, it's helpful. Is the list based on property appreciation, Rental Demand Ratio etc. I've noticed that London is not on the list perhaps because of the current bubble?

 

[CharlesF.Donahue]

Yes, you are right London is not in the list because of the same reason, making profit in London is tougher than other places.